SHARES in Ayala Land, Inc. (ALI) fell last week despite news of the property giant raising P2.78 billion by selling 75 million shares of AREIT, Inc.
Data from the Philippine Stock Exchange showed a total of 68.61 million ALI shares worth P1.88 billion were traded from Dec. 9 to 13, making it the fourth most actively traded issue based on value turnover during the week.
The listed property developer’s shares closed at P26.60 each on Friday, 6.3% lower than its Dec. 6 close of P28.40. Year to date, the stock declined by 22.8%.
Alexandra Margaux Denise G. Yatco, equity analyst at Regina Capital Development Corp., said that several key factors may have influenced the price action movement of Ayala Land. These include recent project kick-offs, higher completion rates, and residential and commercial bookings.
Additionally, Ms. Yatco also said that company-specific developments, such as receiving approval to gain full control of Cebu District Property Enterprise and plans to use Gatewalk Central as a strategic asset to enhance its presence in the Visayas region, could also be a factor.
“However, factors such as potential tariff adjustments and higher operating costs brought about by mall renovations could continue to weigh upon the firm,” she said in an e-mail.
For Aniceto K. Pangan, equity trader at Diversified Securities, Inc., the downtrend of Ayala Land may be due to “negative sentiments” regarding the latest economic developments.
The central bank, he said, may choose to maintain overnight lending rates given the rise in local inflation, and additionally, the peso depreciated last week, which further supports the case for keeping the overnight lending rates steady.
Headline inflation in November accelerated to 2.5% year on year from 2.3% in October, settling within the Bangko Sentral ng Pilipinas’ (BSP) 2.2%-3% forecast for the month. However, this was slower than the 4.1% posted a year earlier.
For the 11 months to November, inflation averaged 3.2%, slightly higher than the BSP’s 3.1% full-year baseline forecast.
Moreover, the BSP began its easing cycle in August with a 25-bp rate cut and then proceeded to deliver another 25-bp rate cut in October, which brings the key rate to 6%. BSP’s Monetary Board will hold its final policy meeting for the year on Dec. 19.
Last week, Ayala Land raised P2.78 billion by selling 75 million shares of AREIT, Inc., its real estate investment trust, at a price of P37 per share. The sale was done through a placement agreement with BPI Capital Corp., the investment banking division of the Bank of the Philippine Islands, and global financial services firm UBS AG Singapore Branch. These offered shares were sold to qualified institutional buyers both within and outside the United States, the company said.
The property developer added that the proceeds from the block sale will be settled on Dec. 12, which is subject to the terms and conditions of the placement agreement.
“This move could hold several meanings for the company’s outlook,” Ms. Yatco said, highlighting that the latest development of Ayala Land may post mixed sentiments from the market.
She noted that by selling AREIT shares, the property developer is reallocating its resources, which could help support its other business ventures. This move, she said, could signal confidence in AREIT’s projected profitability.
“If the market views the sale as a positive, then the stock could see a short-term boost,” she added. However, she also cautioned that if the sale is seen negatively, it could raise concerns over Ayala Land’s long-term strategy, which could potentially lead to a drop in stock price.
“The sale of their AREIT shares was mainly for fundraising to boost their capital expenditure for expansion,” Mr. Pangan said in a Viber message. He added that the company’s outlook remains positive, given the overall trend indicating a decrease in overnight lending rates, where notably, the offering was oversubscribed.
Mr. Pangan also said that with the continued lowering of overnight lending rates, this could sustain Ayala Land’s growth momentum at double-digit rates.
Ayala Land’s consolidated revenues increased by 24.4% year on year to P40.94 billion in the third quarter. This brought its nine-month top line to P125.21 billion, rising by 26.6%. During the July-September period, its attributable net income went up by 14.7% to P8.03 billion. The property developer’s nine-month attributable bottom line rose by 15% to P21.16 billion.
“Overall, [Ayala Land] has generally seen stable residential bookings, lot sales, and enhanced operational procedures, with its [third quarter] earnings seeing an increase in [net income] and revenues,” Ms. Yatco said.
She added that the bulk of its top line growth could be due to real estate revenues, which continue to advance its operations.
Additionally, investors who are looking to expand their property portfolio might consider adding the Ayala-led property developer given its historical performance, as well as upcoming launches and plans for mall and hotel renovations, Ms. Yatco said. She placed Ayala Land’s support levels at P26.30, while its resistance levels are at P28.
“There is a notable downward trend filled with several red candles, with the stock closing in the oversold region,” she said. Ms. Yatco added that selling pressure continues to persist, yet a potential reversal may be seen in the upcoming weeks.
For Mr. Pangan, he pegged immediate support at P26.40 per share, while immediate resistance is at P27.35 per share. — Abigail Marie P. Yraola
